As I said back in December when Aston acquired new financial backing, it needed a tie-up with an entity like Mercedes because it's too small to develop the big stuff alone.

This week's announcement specifically includes Aston using an adapted version of an AMG V8. Good. I like the current Aston V8 well enough, but compared with rivals it lacks direct injection or turbos, and that means its 430bhp is barely enough these days, and it's thirsty. Transmissions have never been our favourite parts of Astons either. AMG will be able to help, possibly with its dual-clutch unit, or its multiple-plate clutched autobox called MCT.

Then there's driver assistance and active crash safety. That's because there are actually two parts to this week's agreement. One is between Aston and AMG for powertrain, and the other is between Aston and the wider Mercedes for 'electrical and electronic architecture'.

Look at the sort of stuff you can get on a 911 or Panamera or Bentley: adaptive LED headlights, radars, pre-collision safety, advanced stability control, camera-based systems, internet connectivity. Being able to plunder the Mercedes cupboard - the best place in the world for this sort of stuff - will do Aston Martin not one bit of harm. We might even see the end of Aston's witless navigation systems in favour of something more up-to-date.

And of course electricity also means hybrid. Neither side will talk about it yet. But Mercedes is again a leader, and I think it's pretty important that Aston Martin can use this on a Rapide successor, whether that's the mildest system or full plug-in assistance. Without that, any luxury car maker will almost be shut-out of markets such as China and the US by the end of the decade.

Less obvious perhaps is what's in it for Mercedes and AMG. Well if the resulting Astons are good cars, it's good for credibility. Look what Pagani did for AMG's reputation. AMG is run by petrolheads, and they just couldn't resist the idea of seeing their V12 in an epic Italian supercar.

But there's got to be money in it too. The Germans will definitely sell their engines and components at a profit to Gaydon. And they might also learn things from Aston's ability to do bespoke design and interiors, and how to foster intimate relationships with fanatical customers.

Only thing is, this could be aiding a competitor. Mercedes-AMG makes some cars that you might think compete with Astons. The SLS and SL65 could be Vanquish or DB9 rivals in some eyes. The CLS63 is well on the way to being a cheap but effective rival for the Rapide. If AMG helps Aston, it could be losing its own sales. Especially as AMG is currently developing a cheaper two-seat front-engined sports car to sit under the SLS. Isn't that a Vantage rival?

Actually, probably not. For a start, Astons always command a higher price - and lower sales numbers - than the equivalently-sized and equivalently-powered AMG. But most of all, they're simply sort of different cars, bought by different sort of people.

Mercedes is good at recognising this, and entering into co-operations accordingly. For instance it works quite closely with Infiniti over diesel engines, and is even donating its A-Class platform to a new Infiniti to be built in Sunderland. You might think Infiniti is a Mercedes competitor. But Mercedes has done research that shows Merc's Japanese competitor is Lexus not Infinti, while Infiniti competes against BMW. So Mercedes can afford to help Infiniti without shooting itself in the foot.